I heard on the news this morning that Ihug are going to offer some fantastic calling rates from October 2nd. Trying to find out more I went to the Ihug website which (typically) mentions nothing.

According to The Line and NZ Herald the deal is:Talk 1 Unlimited calls to any landline in NZ during weeknights and weekends $15 p/monthTalk 2 Unlimited calls to any landline in NZ at anytime $20 p/monthTalk 3 Unlimited calls to any landline in NZ, plus Ihugs top 5 overseas calling destinations, any time $40 p/month

Now, according to Stuff Ihug will charge $45 for a phone line with the Talk 1,2,3 plans being extra. So, what is the truth? The way I heard it on the radio it was only going to cost me $15 for a phone line if I choose 'Talk 1'. Mr Rushworth stated that this was revolutionary and expects 'New Zealanders to flock to Ihug in droves because Telecom has been ripping them off for years'

Interesting comments but what is the truth about the plans and what is the catch?.

Well here is one catch which was only reported in The Line and was not picked up by the other major media outlets:'Calls over one hour are charged at 25cents per minute. However, customers can call back at no extra cost'

But you would have had to pay Telecom for the line rental anyway so technically speaking isn't the plan only costing you $15 anyway? Their advertising is no different to Telecom who advertise you can have broadband for $1 per day - something that fails to take into account the Telecom line rental tax.

Roll on naked ADSL and VoIP - then NZers will really be able to wake up and smell the coffee. It's hard to beat 10c flat rate calls to anywhere in NZ and Aussie..

Once the Telecommunications Amendment Bill has been passed, and the price for accessing Telecom's network has been set, ihug will start putting high-speed Internet equipment in Telecom's exchanges. Using Telecom's copper phone lines, it will offer voice and Internet over its own "backbone" network.

Well, the good news is that LLU has seemingly induced iHug into investing in their own backbone network, relieving the strain on Telecom's. There seem to have been a lot of comments recently about poor peak-time internet connection speeds on ADSL plans so if more ISPs go down this route, they won't be able to pass the buck on to Telecom and should spread the network load better.

Roll-on more competition.

By the way, if iHug are copying Carphone Warehouse then this is excellent news - they recently offered a "free" 8Mbps broadband service. The free is in quotes as of course you have to sign up to one of their more expensive toll deals.

sbiddle: But you would have had to pay Telecom for the line rental anyway so technically speaking isn't the plan only costing you $15 anyway?

No, as far as I understand it, Ihug will be a Telecom Wholesale customer like TCL, and hence you will pay ihug the rental as well.

I realise that and should have made myself clearer.

The issue was whether the $15 for "unlimited" calls was misleading because you had to ay $45 for your line rental. This is no different to all the marketing for ADSL that says $1 per day broadband when you're having to pay for the phonline to get it.

sbiddle: The issue was whether the $15 for "unlimited" calls was misleading because you had to ay $45 for your line rental. This is no different to all the marketing for ADSL that says $1 per day broadband when you're having to pay for the phonline to get it.

It is misleading but seems to be acceptible practice in NZ.

It's always surprised me that ADSL ISPs have always managed to quote very reasonable prices but neglected to make it clear that the monthly copper line charge is also incurred. For many people, this would make the difference between a good deal and a bad one, which leaves no doubt that it's misleading.

sbiddle: But you would have had to pay Telecom for the line rental anyway so technically speaking isn't the plan only costing you $15 anyway?

No, as far as I understand it, Ihug will be a Telecom Wholesale customer like TCL, and hence you will pay ihug the rental as well.

I realise that and should have made myself clearer.

The issue was whether the $15 for "unlimited" calls was misleading because you had to ay $45 for your line rental. This is no different to all the marketing for ADSL that says $1 per day broadband when you're having to pay for the phonline to get it.

It is misleading but seems to be acceptible practice in NZ.

It was the same in the UK until LLU was implemented - broadband was about £25 a month (no cap), but you needed a BT line (extra £12/month) to get it. Or you connected to NTL/Telewest cable, but that was a real case study of shoddy customer service :-)

I think Ihug are going h*ll for leather to get as many wholesale connections as possible (based on price), and are hoping like h*ll that ULL is implemented quickly, so they can convert their wholesale base en masse, flicking from cost neutral to margin generating.

But it's a great leap of faith to assume that ULL is implemented on time, in an easy to access way, with clear and easy rules. And that nobody else like Callplus, Compass or TCL throws a spanner in the works in terms of their infrastructure requirements.

if i choose plan 1, i pay $15 for plan1 + $15 for the line rental?if i choose only the homephone then i pay $45?also on ihug website they say bundle broadband and homephone with a plan and save $ 10 a month off broadband....so my $60 plan will cost $50 if i get the homephone + plan1 for = $30/month + $50 for broadband?

I wonder how long it will be before we see a Carphone Warehouse presence in NZ? With their recent aquisition in Australia and expansion into North America they are getting closer. NZ would seem to be an ideal market for them to enter with some of their products.